The European Commission recently fined tech giants Apple and Meta for non-compliance with the Digital Market Act, sparking potential trade tensions with the US. Apple was fined €500 million for preventing developers from communicating freely with consumers, while Meta was fined €200 million for its “pay or consent” advertising model that doesn’t comply with the DMA. These fines are at the lower end of the scale, considering potential fines of up to 10% of annual turnover for breaches of the DMA.
Despite the fines, Apple and Meta both intend to appeal, criticizing the EU regulatory approach as akin to tariffs and potentially damaging to the privacy and security of users. Apple claims that the European Commission is unfairly targeting them in a series of decisions that are detrimental to their products, while Meta’s Chief Global Affairs Officer suggests that the Commission’s actions impose a multi-billion-dollar tariff on Meta and force them to offer an inferior service. These reactions indicate a potential escalation in the ongoing tensions between tech giants and EU regulators.
The European Commission’s decision to fine Apple and Meta comes after an investigation into their practices, which were found to reinforce the dependence of business users and consumers on their platforms. The Commission has also closed two cases targeting the same companies: one involving Apple’s failure to allow changes of browser choice screens, and another regarding Facebook Marketplace not being considered a core platform service under the DMA. The fines, although relatively low, were based on considerations of the gravity, duration, and recurrence of the violations.
The EU insists that the DMA and the Digital Services Act are agnostic, non-discriminatory regulations that are not up for discussion in trade tariff negotiations with the US. However, the US administration views these regulations as non-tariff barriers to trade and believes they should be part of the discussions surrounding trade tariffs. This differing perspective on regulatory approaches has the potential to escalate existing trade tensions between the EU and the US, particularly in the tech sector where American tech giants like Apple and Meta are heavily involved.
Overall, the fines imposed on Apple and Meta by the European Commission highlight the ongoing challenges faced by tech giants in navigating regulatory frameworks in different jurisdictions. The companies’ reactions to the fines reflect their concerns about the potential impact on their operations and business models. The differing views between the EU and the US on regulatory approaches further complicate the situation, potentially leading to further trade tensions. It remains to be seen how these issues will be resolved and what implications they will have on the broader tech industry and international trade relations.
